By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- U.K. stocks scaled higher Monday, with
mining shares supporting a rise in the FTSE 100 as Chinese data
soothed concerns about slowing growth in a key market for U.K.
producers.
The U.K. FTSE 100 index rose 0.3% to 6,876.57, adding to
Friday's advance of 0.7% that resulted in the index's breaking a
three-day run of losses.
Top gainers on Monday included Randgold Resources Ltd. and
Fresnillo PLC , rising 1.5% and 1.2%, respectively, after an
overnight report that China's exports jumped 7% in May from the
year-earlier period, in line with expectations.
Copper producer Antofagasta PLC. rose 1.3%, and Anglo American
PLC picked up 0.9%.
But moving in the red were shares of Lloyds Banking Group PLC ,
down by 1.3% as Lloyds priced the initial public offering of its
TSB unit between 220 pence ($3.69) to 290 pence. Lloyds expects to
sell 125 million ordinary shares, and the offer represents around
25% of the TSB unit. The midpoint of the price range puts TSB's
market capitalization at around GBP1.275 billion.
"The price is almost a third below book value, in an attempt to
woo investors in an IPO climate that many believe is getting
tougher," wrote ETX Capital in a Monday note. Final pricing of the
IPO will be announced on or around June 20.
Turning to the broader economy, analysts at Morgan Stanley said
Monday they now expect the Bank of England to raise interest rates
in the first quarter of 2015, rather than in the second quarter as
previously expected. By the first quarter of next year, recovery in
the U.K. economy "will look even more embedded, and we expect it to
be more obvious that underlying domestic inflationary pressures are
picking up," the analysts said in a note. There is a possibility of
a rate hike in 2014 as "the economy continues to do well, and
business surveys suggest that there is little (if any) spare
capacity within firms," the analysts said.
Morgan Stanley also raised its economic-growth forecasts for the
U.K. It now expects 3.1% expansion in 2014, up from a previously
expected rate of 2.8%. For 2015, GDP is forecast to grow by 2.7%,
up from a 2.4% estimate.
More news from MarketWatch:
ECB's Coeure says rates to stay low
Spain's decline in home prices slows
China's real-estate market sees land sales plunge
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